Piper Jaffray raises estimates for Apple's Sept quarter

Investment bank Piper Jaffray boosted its estimates for Apple's current quarter on Monday, noting that iPhones will for the first time account for a material portion of the company's booked revenue.

Citing recent NPD market data as the driver behind his modifications, analyst Gene Munster now expects the Cupertino-based company to report earnings of $1.17 on revenue of $8.37 billion, driven by sales of 2.8 million Macs, 11 million iPods, and 5 million iPhones.

That's up from his previous estimate of $1.04 in per share earnings on revenues of $7.9 billion from sales of 2.5 million Macs, 10.8 million iPods, and 4.1 million iPhones. The Street consensus is $1.11 in per share earnings on revenues of $8.07 billion.

Separately, Munster noted that the soon-to-end September quarter marks the first time the iPhone will account for "a meaningful percentage" of Apple's booked revenue.

"Last quarter (June) it was 4 percent, and this quarter (Sept) we are modeling for it to be 21 percent," he wrote.

As such, the analyst also published a new metric to help investors quantify the full impact of iPhone sales by assuming revenue from each model is accounted for at the time of sale, rather than spread over the course of 2 years per the company's current accounting practices.

"We are calling this booked EPS and revenue," Munster said.

He estimates Apple would report per share earnings of $1.60 on revenue of $10.15 billion for the September quarter under that model, which would mimic the way the company accounts for sales of Macs, iPods, and almost everything else in its product portfolio.

Munster maintained his Buy rating on Apple shares with a price target of $250.

i'm happy to see apple getting its time in the sun on wall street... but these investment banks with their forecasts and estimates are part of the reason we're in this financial mess.

investments banks = greed machines. and i used to work for robertson stephens, an investment bank that went belly up in 2002. so i know how they work inside. the age of investment banks is over, and good riddance.

As such, the analyst also published a new metric to help investors quantify the full impact of iPhone sales by assuming revenue from each model is accounted for at the time of sale, rather than spread over the course of 2 years per the company's current accounting practices.

Unless I missed something completely... The reason for the deferred accounting was "free software updates" (as with the Apple TV), not the revenue sharing model. I have not heard SJ mention the end of free software updates. Did they guess deferred accounting is discontinued - or do they know something that has not been previously posted (or have I been hibernating)? During the last conference call they have only mentioned that they will account for the models being sold after the software 2.0 announcement after it is released (so quite some Q2 sales will appear in Q3), no mention of changing the accounting model was made? I also do not think changing this practice would be in line with the predicted drop in margins?!

i'm happy to see apple getting its time in the sun on wall street... but these investment banks with their forecasts and estimates are part of the reason we're in this financial mess.

investments banks = greed machines. and i used to work for robertson stephens, an investment bank that went belly up in 2002. so i know how they work inside. the age of investment banks is over, and good riddance.

Is there a company out there that is not a greed machine? That's the idea, right? Greed is good, don't you know

Unless I missed something completely... The reason for the deferred accounting was "free software updates" (as with the Apple TV), not the revenue sharing model. I have not heard SJ mention the end of free software updates. Did they guess deferred accounting is discontinued - or do they know something that has not been previously posted (or have I been hibernating)? During the last conference call they have only mentioned that they will account for the models being sold after the software 2.0 announcement after it is released (so quite some Q2 sales will appear in Q3), no mention of changing the accounting model was made? I also do not think changing this practice would be in line with the predicted drop in margins?!

They are not assuming that the deferred accounting model is changed, they are just providing two sets of numbers to their clients (and the public) ("THEY" being the iBank, not Apple of course) to help people better understand the true business that's going on at Apple.

It must be tough sticking to a $250 price target right now, and they're doing everything they can to point out the positives.

Piper Jaffray must be Last Man Standing of the Investment Banks as we know them right ?

I am surprised they still are active and trading. Guess they did not expose themselve too much to dodgy mortgages...

Funny you should bring that up: In the midst of (and in spite of) all the carnage in financial services stocks this past week, Piper Jaffray is actually up about 25% since market open last Monday (Sept 15)!

Unless I missed something completely... The reason for the deferred accounting was "free software updates" (as with the Apple TV), not the revenue sharing model. I have not heard SJ mention the end of free software updates.

You've got that backwards. The deferred accounting is the rationale behind free software updates for the iPhone. And the stated reason for the deferred accounting is to smooth out the revenue stream. The reason Apple would want a smooth revenue stream is to make the revenue appear more stable--despite lapses between new product launches and upgrades--and for the stock to appear a more stable investment.

Piper Jaffray must be Last Man Standing of the Investment Banks as we know them right ?

I am surprised they still are active and trading. Guess they did not expose themselve too much to dodgy mortgages...

They are under their parent company, UBS and I'm trying to figure out why AI still calls them Piper Jaffrey seeing as that company switched it's name to UBS the last time I checked on one's stock portfolio.